Ovostar Union N.V. (WSE: OVO) (hereinafter, the “Group”), a vertically integrated holding company, one of the leading egg and egg products producers in Ukraine, announces its financial results for the three months ended 31 March 2015.
Revenue, gross profit and gross margin
In the 1Q 2015 Ukrainian currency devalued 2.4 times year-on-year from 8.86 to 21.12 UAH / 1 USD. As a result, over the reporting period the Group’s revenue in USD terms decreased by 11% year-on-year to mUSD 17.1 (1Q 2014: mUSD 19.1). Gross profit decreased by 12% to mUSD 8.0 from mUSD 9.1 while gross margin stayed practically the same year-on-year at 47%. Share of export sales increased by 56% and amounted to 25% of total revenue over the reporting period.
Operating profit, EBITDA and cash flow from operating activities
Over the 3 months of 2015 operating profit increased by 3% to mUSD 8.3 from mUSD 8.1. Selling and administrative expenses compressed by 48% year-on-year to mUSD 0.6. The Group received mUSD 1.1 in 1Q 2015 under special VAT treatment which was reflected in other operating income. EBITDA amounted to mUSD 8.8 (1Q 2014: mUSD 9.2) while EBITDA margin increased from 48% to 52% year-on-year. Cash flow from operating activities increased to mUSD 7.8 in the 1Q 2015 from mUSD 7.2 in the same period last year.
Net profit and exchange differences on translation to presentation currency
Over the 3 months 2015 net profit increased by 16% to mUSD 9.1 (1Q 2014: mUSD 7.9). In line with Ukrainian hryvnia devaluation during the 1Q 2015, the Group has recorded negative exchange differences on translation to presentation currency in the amount of mUSD 32.4 that have been reflected in equity.
The Group’s CEO Borys Bielikov noted:
“The Group’s management is content with financial results of the 1st quarter of 2015. Despite significant devaluation of the national currency we were able to deliver reasonable results. This was ensured by a 21% increase in volume of eggs produced as well as significant increase in export revenue that amounted to 25% of total sales volume.”